Can a numbers man steer the world’s biggest automaker through a geopolitical storm? Toyota on Friday named Chief Financial Officer Kenta Kon as its new chief executive, handing him the controls on April 1 as the company grapples with U.S. tariffs, falling profits and accelerating competition in electric vehicles and software.
Kon will replace Koji Sato, who was elevated to CEO in 2023 and will stay on as vice chairman with a newly created chief industry officer brief that funnels him toward wider industry and lobbying roles. In Toyota’s framing, Kon will run the company’s day‑to‑day operations while Sato takes on “national team” duties — representing Toyota and the Japanese industry in bodies such as the Japan Automobile Manufacturers Association and Keidanren.
A finance chief for a bruising chapter
Kon isn’t an outsider. A longtime Toyota executive and once a secretary to former chairman Akio Toyoda, he’s widely regarded inside the company as a pragmatic operator who can squeeze costs and steady earnings. Company briefings leaned into that message: Kon was framed as an “earnings expert” whose skillset suits a period when Toyota is defending margins more than chasing rapid growth.
That need is urgent. Toyota reported a sharp fall in quarterly profit and said tariffs imposed by the United States have carved deeply into results — management estimates put the tariff hit at well over a trillion yen last year. Operating income slipped even as sales rose, prompting the company to lean on a weaker yen and internal cost cuts when it raised its full‑year profit outlook.
At a press briefing, Kon used a sporting metaphor — saying Sato would be the “captain of the national team” while Kon would be the “club captain” — underscoring the split between industry advocacy and corporate management.
Pressure from tariffs and rivals
The switch comes at a time when protectionism looms large. A trade agreement between Japan and the U.S. left Japanese car exports facing a 15% tariff on vehicles bound for America — a level far above what automakers have historically shouldered and one that executives say eats into profits and investment plans. Toyota and other manufacturers have publicly warned that higher levies are forcing painful choices over pricing, production footprints and where future electric vehicle investments land.
Meanwhile, China’s homegrown firms, led by companies such as BYD, are pressing hard on battery vehicles and software-driven features. Toyota’s historic strength in hybrids has kept it competitive, but the speed of change in pure EVs and vehicle software stacks represents a different battlefield — one where nimble startups and Chinese giants are already well advanced. That makes industry‑level coordination and policy heft — Sato’s new remit — strategically important as much as internal cost discipline.
Software and services are becoming a bigger battleground, too. Automakers now compete not just on propulsion but on navigation, in‑car AI and user experience — areas that will determine who controls recurring revenue streams and customer relationships. (For context on how navigation and conversational AI are entering cars, see how mapping platforms are adding copilot features.)[/news/google-maps-gemini-ai-copilot]
What changes inside Toyota
The leadership reshuffle also touches the finance bench: Executive Vice President Yoichi Miyazaki will take over as CFO, and Toyota plans further board changes in June when Kon is expected to join the board and Sato will step down from it.
Toyota said the new structure is meant to speed decision‑making and accelerate its transformation into a broader mobility company. That balancing act — pushing transformation while protecting a sprawling, global manufacturing business — is visible in other automakers’ moves as well. Even legacy players are beefing up performance and product diversification to stay relevant, and some recent strategies show how varied the responses can be across the industry.[/news/ford-maverick-300t-raptor-r-kits]
The immediate numbers and the longer test
On the numbers front, Toyota reported that electrified models — hybrids, plug‑in hybrids and EVs — made up nearly half of its retail sales in the first three quarters of the fiscal year, a point the company leaned on to show progress even as pure EV competition intensifies. Quarterly sales rose, but operating income cooled, and full‑year profit guidance still sits well below prior peaks.
What Kon must deliver is twofold: steady the company’s earnings and capital allocation pathway so Toyota can absorb tariff shocks; and keep Toyota competitive in the long run — not just through manufacturing scale but by closing gaps in batteries, software and mobility services. He inherits a rare combination of stability and disruption: a brand that still tops global sales but one that faces margin pressure and a rapidly shifting competitive landscape.
Toyota’s next moves will be watched by investors, suppliers and governments. Will Kon’s cost focus buy the company time to retool for an electric‑and‑software future? Or will rising trade barriers and faster rivals force more radical restructuring? The answers will emerge in boardrooms, factory floors and — most tellingly — in the next round of vehicle launches and partnerships.
No neat ending yet. Just a new steward for a company that has to navigate politics, pixels and powertrains all at once.